Powered by IFAD

Rural poverty in Sri Lanka

Despite the fact that the country has been engaged in a 26-year conflict that ended only recently, Sri Lanka has made significant economic and social progress over the past 30 years. Economic growth has been rapid, and the estimated 2010 GDP growth rate is over 9 per cent – among the top 10 in the world. Between 2006 and 2009, the poverty level fell by half to about 7 per cent. In the past three decades, the country has made significant progress in improving living conditions and access to basic services. However, young people face an unemployment rate four times higher than the population as a whole, according to 2010 estimates.

The great majority of the population lives in rural areas, though the country is rapidly urbanizing. Almost a quarter of Sri Lankans live below the poverty line. Four fifths of the country’s poor people live in the rural sector, and almost half of the poor rural population consists of small-scale farmers. They are concentrated in the Central, Uva, Sabaragamuwa and Southern provinces, where agricultural growth has been sluggish, as well as in areas affected by the conflict.

Agriculture is the most important sector of the Sri Lankan economy, and small-scale farmers produce most of the country’s agricultural output. However, their production systems are hampered by neglect, poor economies of scale, low investment levels resulting from poor financial services and inappropriate or limited technology. Other factors limiting poor farmers’ livelihoods include fragmented landholdings, high post-harvest losses, inconsistent pricing and trade policies, and difficulties accessing lucrative markets.

While its contribution has declined during the past three decades, agriculture accounts for almost 15 per cent of gross domestic product and a quarter of total exports. It is the most important source of employment, providing jobs for around one third of the workforce.

As a developing island nation, Sri Lanka is particularly vulnerable to climate change. The sea level is expected to rise by half a metre over the next two decades. Climate-related impacts, already evident, include more frequent and more intense floods and landslides, which cause extensive damage and loss to assets and displacement of people, particularly poor people. With predictions of higher temperatures and lower rainfall, output of paddy – which is dominated by small-scale cultivation – is expected to fall up to 30 per cent over the next 20 to 30 years. Rising sea levels could force communities to leave lower coastal areas of the north and east, where the recent conflict was concentrated.
 

Source: IFAD